It's been a brutal December for Wall Street, and this week was no exception. The Dow and S&P 500 are all staring at their worst week s since March, while the Nasdaq is headed toward its biggest weekly loss since January 2016. Plus, all three indexes remain deep in correction territory, and sport month-to-date deficits of 11% or more.

The sell-off started on Monday, and was exacerbated mid-week following the Federal Reserve's decision to hike interest rates. From there, all three indexes fell to annual lows amid fears of a government shutdown, as President Donald Trump clashes with Democrats over border wall funding. Amidst all this, oil prices explored new lows, and Wall Street's "fear gauge," the Cboe Volatility Index (VIX), climbed to 10-month highs. 

Nike, Boeing are Dow Bright Spots

Despite the dour mood on Wall Street, some positive headlines emerged. Dow stocks Boeing (BA) and Johnson & Johnson (JNJ) enjoyed early week tailwinds after the blue chips announced buyback plans. Meanwhile, healthcare giant Merck (MRK) just flashed a bullish signal, while Nike (NKE) toasted an impressive quarterly report. However, it wasn't all roses, with newest Dow member Walgreens Boots Alliance (WBA) heading toward its worst month in years.

Chip Stocks Get Dire Warning From Morgan Stanley

On Wednesday, Morgan Stanley weighed in on the semiconductor sector, urging investors to "stay cautious" amid recent headwinds. The bear note came after Micron Technology (MU) earnings, with the chipmaker issuing a cautious outlook for 2019.

Retail Stocks On Watch Before Christmas

With Christmas right around the corner, retail stocks continued to be in focus. Two stocks you may want to steer clear of are Abercrombie & Fitch (ANF) and Best Buy (BBY), with the former flashing a bearish technical signal and the latter still reeling from a harsh downgrade. And while bullish analysts targeted Lululemon (LULU), CarMax (KMX) nabbed a big earnings victory. In addition, athletic retailer Under Armour (UAA) sent up a bullish signal after a bear note.

Next Trading Week is a Short One

Next week will be a holiday-shortened one, with the stock market closing at 1 p.m. ET on Christmas Eve and and shuttered all day on Christmas. While this S&P 500 signal suggests next week could see bullish price action, traders may want to the avoid these stocks in the near term. Looking ahead, here are some FAANG stocks that could have a big 2019.

Stocks are struggling the week before Christmas. Three names taking part in the widespread weakness are iPhone maker Apple Inc. (NASDAQ:AAPL), tech name BlackBerry Ltd (NYSE:BB), and e-commerce services provider Shopify Inc (NYSE:SHOP). Let's take a look at the damage shares of AAPL, BB, and SHOP have experienced today.

Apple Stock Flirts With Worst Close In A Year

AAPL stock was last seen down 2.1% at $153.57, and earlier came within 2 points of its February low of 150.24. Still, this would mark Apple's lowest closing price in over a year, with the equity following up November's 18.4% decline with a 14.1% deficit so far in December.

In the analyst community, 28 brokerage firms are covering the Dow component, and half of them still call Apple a "buy" or "strong buy." Moreover, the average 12-month price target stands up at $221.02. The door would seem to be open for some downwardly revised outlooks from analysts, and just today Independent Research slashed its AAPL price target to $205 from $260.

New Lows For BlackBerry

BB stock is also set for its lowest close for the past year, down 7.1% at $7.01. This just extends the shares' longer-term downtrend, bringing their year-to-date deficit to about 37%, and comes just a day after the security tried to rally after a third-quarter earnings beat. Canaccord Genuity was one of at least brokerage firm to lower its price target on BlackBerry, dropping it to $9 from $11.

Meanwhile, short interest has actually been declining on the security. Looking at the last two reporting periods, short interest fell by 19.3%, though 6.7 days' worth of buying power is still controlled by these bears, going by average daily volumes.

Upgrade Does Nothing for SHOP Stock

SHOP is down 3.6% at $123.18, set for its second lowest close since April. The stock is getting no help from an upgrade to "buy" from "neutral" at D.A. Davidson. Shopify was trading near $164 just last week, and options traders are likely hoping more downside is ahead. For example, the 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 1.16, ranking in the 81st annual percentile. Said in simpler terms, put buying has been unusually popular during the past two weeks, hinting at bearish expectations.

Perrigo Company (NYSE:PRGO) said it has been ordered by Ireland to pay $1.9 billion in back taxes for 2013. The bill comes after it was found that intellectual property sales of Elan Pharma -- which Perrigo acquired in 2013 in a corporate tax inversion -- were taxed incorrectly. In reaction, PRGO stock is down 26.5% to trade at $38.47, earlier hitting a nine-year low of $38.13.

This negative price action is nothing new for the over-the-counter pharmaceutical firm. Today's drop puts PRGO shares on track for their seventh straight loss, the longest daily losing streak since October 2017. Plus, the equity is pacing for a 45.8% quarterly loss -- its worst on record -- and has shed 55.9% year-to-date.

Perrigo options are flying off the shelves today, with around 6,500 calls and 2,000 puts on the tape, 15 times what's typically seen. Eleventh-hour traders are targeting the December 40 calls, where at least some of the activity appears to be of the buy-to-open kind.

Other speculators may be initiating new positions at the February 45 call, though there appears to be a mix of buying and selling occurring. Those purchasing the calls expect PRGO stock to climb back above $45 by February options expiration, while those writing the calls are betting the strike will serve as a short-term ceiling.

Shares of Metlife Inc. (NYSE:MET) are down 0.6% at $39.11, after the company on Thursday reached a settlement with the state of Massachusetts over claims that it failed to pay pensions to thousands of retirees it improperly "presumed dead." The insurance provider will have to pay $1 million fine to resolve the claim filed last June. 

And losses could continue to mount for MET stock going forward, after Fed Chair Jerome Powell and the rest of the Federal Open Market Committee (FOMC) opted to move forward this week with their latest interest rate hike. Per data from Schaeffer's Senior Quantitative Analyst Rocky White, MET tops the list of worst stocks to own the week after Fed rate hikes.

In fact, since the current policy-tightening cycle began in late 2015, the equity has averaged a one-week loss of 2.3% following rate hikes, with 0% positive returns in the post-hike week. If this track record is any indicator, shares of MET could soon dip to $38.34, based on Wednesday's closing price -- which would mark the lowest it's traded since September 2016. 

KBW cut its price target on the stock to $53 from $56 earlier this week, and others may follow suit as MET continues to trend lower. Six of 11 analysts give Metlife a "buy" or better rating, with not a single "sell." Any price-target cuts or downgrades from this group could spark short-term selling pressure on the shares.

The shares of Tesla Inc (NASDAQ:TSLA) are down 2.6% in electronic trading today, after it was reported the company had cut the price of its Model 3 vehicle in China. This is the third time in the past two months Tesla has reduced the price of the vehicle. 

Tesla stock started December off strong in the wake of a big bull note. Last week, however, was the electric car name's worst weekly drop since Sept. 7. On the charts, TSLA is now set to open around $311, an area home to its pre-bear-gap levels from early October and the shares' year-to-date breakeven level. The stock is also pacing for a fall below the 200-day moving average.

Short sellers have been heading for the exits lately. Short interest fell 8.6% in the last two reporting periods to 27.36 million shares, the lowest amount since October 2017. However, this still represents a hefty 21.5% of TSLA's total available float. 

In the options pits puts have been popular lately. Looking at data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio sits at 1.12, showing a distinct preference for put buying over call buying during the past two weeks. What's more, this level of put buying relative to call buying is highly unusual, and in fact this reading ranks in the 94th annual percentile.

JD.com, Inc. (NASDAQ:JD) was last seen down 7.7% at $19.46, as traders react to news that the company's founder and CEO Richard Liu will not be charged after being accused of rape back in September. JD shares were trading above $30 before the news hit, and wound up hitting an all-time low of $19.21 a month ago.

Meanwhile, option traders' sentiment has shifted since we last looked at the e-commerce giant earlier this month. Specifically, JD's 10-day put/call volume ratio at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) has moved up to 0.90. While this shows call buying has remained more popular on an absolute basis, the reading ranks in the 92nd annual percentile, revealing an unusual interest in long puts.

Pessimism has been building elsewhere, too. Short interest rose by 13.7% in the last two reporting periods, and now accounts for 6.9% of the total float. At the same time, it'd take these bears just 2.2 days to cover, based on average daily trading volumes. As for analysts, there are 13 in coverage, and just four recommend buying JD.com. The average 12-month price target sits up at $27.89, however.

The shares of Facebook, Inc. (NASDAQ:FB) are trading down 1.4% at $123.212 -- earlier hitting a nearly two-year low of $123.05, after Wedbush removed the FAANG stock from its "Best Ideas" list. However, the brokerage firm maintained its "outperform" rating and $220 price target, a 76% premium to Friday's close.

Today's negative price action is just more of the same for FB stock, which is pacing for a 24% fourth-quarter loss -- its worst quarterly performance since the third-quarter of 2012. What's more, Facebook is on track to close below its 50-month moving average for the first time since the trendline formed in June 2016.

Against this backdrop, skepticism has been ramping up both in and outside of the options pits. In addition to a handful of FB stock downgrades, put buying has accelerated at the major options exchanges in recent weeks.

Drilling down on specific options, the January 2019 140 and 150 strikes are home to peak put open interest, with more than 97,000 contracts currently outstanding. Data shows at least some buy-to-open activity at each strike, suggesting options traders are targeting more losses for Facebook at the start of 2019.

Last week was certainly a rough one for the broad-equity benchmarks, but it was particularly brutal for shipping giant FedEx (FDX). On Wednesday, the stock registered its biggest daily percentage drop in a decade after taking a hatchet to its fiscal 2019 profit forecast. The news caused a ripple effect across the transports sector, as CEO Alan Graf warned, "Global trade has slowed in recent months, and leading indicators point to ongoing deceleration."

With FDX as its top holding, the iShares Transportation Average ETF (IYT) felt the pain, too. By the end of the day on Wednesday, IYT was in "official" bear-market territory, down more than 20% from its mid-September closing high.

Plus, IYT wrapped up the week by closing two consecutive sessions beneath its 1,000-day moving average for the first time in over two years. This longer-term moving average is one of those "under-the-radar" technical levels we often like to track in our research, and the historical significance of the 1,000-day for IYT had been flagged by Schaeffer's Quantitative Analyst Chris Prybal just ahead of Thursday's closing break.

Looking back over the past eight years or so, there have been only a few previous examples of IYT diving below its 1,000-day moving average while simultaneously trading below both its 200-day and 320-day trendlines, as it is now. The prior occurrences in 2011 and 2016 coincided with extremely oversold readings from the exchange-traded fund's (ETF's) 14-day Relative Strength Index (RSI) -- and those breaks below the 1,000-day were relatively brief, lasting anywhere from just two days (around the time of the June 2016 Brexit vote) to just under two months (mid-August to early October 2011, and early January to mid-February 2016).

As of the end of last week, with its 1,000-day moving average now overhead, IYT was testing another possible layer of support at a rising trendline connecting a series of higher lows going back to its March 2009 bear-market bottom (represented by the red dashed line on the accompanying chart). However, support here is hardly foolproof; a successful test of this foothold on Thursday gave way to a break on Friday, and back in January 2016, selling pressure was heavy enough that the shares barely paused at this trendline before eventually bottoming around $115.

Late in the third quarter, we spoke about the "exhaustion" in the transports rally as a red flag for stocks. With that prospective "canary in the coal mine" scenario having since played out in about the grimmest possible fashion, we'd advise you in the weeks ahead to pay close attention to IYT's next moves around these longer-term trendlines (a technical trial that's largely escaping the notice of the financial media). A continued slice below these levels could foretell more pain and selling to come for stocks, while an oversold bounce back above -- and subsequent hold of -- these support layers would provide some cause to anticipate a period of short-term stabilization.

Subscribers to Bernie Schaeffer's Chart of the Week received this commentary on Sunday, December 23.

The shares of Etsy Inc (NASDAQ:ETSY) gapped nearly 24% higher the session after the e-tailer's blowout earnings report in early November, eventually topping out at a record high of $58.30 on Dec. 4. The security has since pulled back amid broad-market headwinds, but is now trading near a trendline with historically bullish implications -- suggesting the retail stock could bounce quickly in the new year.

Specifically, ETSY shares are trading within one standard deviation of their 160-day moving average. Previous pullbacks to this trendline after the stock has been trading above it for a lengthy stretch have resulted in a one-month average gain of 14.34%, according to data from Schaeffer's Senior Quantitative Analyst Rocky White, with all six of the individual returns positive.

There's plenty of skepticism to unwind on a stock that's doubled in value year-over-year. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), ETSY's 10-day put/call volume ratio of 3.25 ranks in the 100th annual percentile, meaning puts have been bought to open over calls at a quicker-than-usual clip.

And while short sellers have started throwing in the towel on their losing bets, there's still 9.35 million shares dedicated to these bearish bets. This accounts for a healthy 9.5% of Etsy stock's available float, and would take almost four days to cover, at the equity's average pace of trading.

 

Acorda Therapeutics (NASDAQ:ACOR) shares are up 5% at $13.59 today, lifted by Friday's late-breaking news that the Food and Drug Administration (FDA) approved its new Parkinson's drug. The inhalable treatment, INBRIJA, is expected out during the first quarter of 2019. Today's rally for ACOR is pulling it out of the gutter -- the stock ended last week at 12-year lows -- and could help the shares snap their four-day losing streak. 

That losing streak and multi-year lows capped off the serious pummeling ACOR has taken since an early September sell-off in which the security lost nearly a quarter of its value in a single day. The shares have since encountered resistance at the $20-21 area. Down 36.7% year-to-date, ACOR is headed for its second-worst year on record. 

Analysts are primarily cautious, with five of eight issuing ACOR a tepid "hold" rating. However, two still see it as a "strong buy," and only one slapped it with a "strong sell." What's more, the 12-month consensus price target of $21.89 still represents a 61% premium to the stock's current levels. 

ACOR's recent slump sparked some bearish speculation, with short interest up 13.3% in the past two reporting periods. That means today's rally could be the result of a short squeeze among some of the weaker bearish hands, as short interest now represents a whopping 20.7% of the stock's available float. Plus, at ACOR's average daily trading volume, it would take almost a month to repurchase all of these bearish bets -- a catalyst for additional tailwinds should pessimism begin to unwind. 

Crispr Therapeutics AG (NASDAQ:CRSP) is trading up 9.9% at $24.98 today, after it was revealed Friday evening that cystic fibrosis specialist Vertex Pharmaceuticals (VRTX) took a 10.1% stake in the gene editing company. On Friday, CRSP stock touched a nearly 52-week low of $22.22, as it's struggled mightily in the second half of the year.

To be more specific, the shares traded as high as $73.88 in late May, but since then have been stuck in a relentless downtrend. In just the past three months, Crispr Therapeutics has shed 45%, and not surprisingly ended up in oversold territory, like many stocks across the market, according to its 14-day Relative Strength Index (RSI) of 22. 

Still, analysts have mostly remained bullish. Of the 11 brokerage firms in coverage, seven say to buy CRSP. Even more notable, the average 12-month price target from the brokerage bunch stands all the way up at $66.17.

As for options traders, near-term open interest remains heavily call-skewed, according to the Schaeffer's put/call open interest ratio (SOIR) of 0.56, which ranks in the 9th annual percentile. On the other hand, put buying has picked up at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), with the 10-day put/call volume ratio of 0.81 arriving in the 80th annual percentile. Said differently, there's been a greater-than-usual interest in put buying relative to call buying in recent weeks.

The shares of Guangzhou-based broadcasting name HUYA Inc (NYSE:HUYA) hit a record low of $14.44 on Dec. 7, after the arrest of a top Huawei exec sparked a sell-off in Chinese stocks. A short-lived bounce was quickly contained by the equity's descending 40-day moving average, and previous such signals have marked good selling opportunities on the stock.

Per data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been two other times HUYA stock has come within one standard deviation of its 40-day trendline after trading below it for 60% of the time in the past two months, and closing below it in eight of the last 10 sessions. These previous signals have resulted in a negative one-month return of 24.33%.

Looking closer at the charts, HUYA stock began trading on the New York Stock Exchange (NYSE) on May 11 at $15.50. The shares climbed as high as $50.82 on June 15, but have trended steadily lower since tagging that notable milestone, and are currently pacing for a fourth-quarter loss of 35.5%. Today, Huya shares are down 2.8% at $15.14.

Options traders have been bracing for more losses, per the stock's top-heavy 10-day put/call volume ratio of 1.16 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The weekly 12/28 16.50-strike put has seen one of the biggest increases in open interest over this two-week time frame, and data points to buy-to-open activity here.