Bulls Snap 3-Week Losing Streak
The market was in rally mode from the start of Friday’s open and maintained momentum throughout the session in hopes of a good outcome in the trade talks between U.S. and Chinese representatives. Tweets from President Trump confirmed that the U.S. had reached what is being called a phase 1 deal with China that will be put into writing and signed.
The deal covers intellectual property, financial services and $40-$50 billion in agricultural goods purchase. Additionally, Treasury Steve Mnuchin confirmed that the tariff hike that was threatened for next week will not go forward now that a deal has been reached. The gains help snapped a 3-week losing streak for the overall market with the major indexes now in positive territory for the month, aside from the small-caps.
The Russell 2000 rallied 1.8% following the intraday push to 1,525 and close back above the 1,500 level. Prior and lower resistance at 1,515-1,530 and the 50-day moving average was tripped but held with a close above the latter and the 200-day moving average being an ongoing bullish signal.
The Nasdaq zoomed 1.3% after testing an afternoon high of 8,115 and easily closing back above its 50-day moving average. Prior and lower resistance at 8,100-8,150 was breached but held with a move above the latter getting 8,200-8,250 in play. The September highs tapped 8,243 and 8,237 and were a week apart.
The Dow surged 1.2% after trading to a 2nd half high of 27,013. Current and lower resistance at 26,800-27,000 was cleared and held with a close above the latter signaling additional strength towards 27,250-27,500 and the July all-time peak at 27,398.
The S&P 500 soared 1.1% following the intraday day push to 2,993. Lower resistance from early September at 2,975-3,000 was cleared but held with a close above the latter getting 3,025-3,050 and fresh all-time highs back in focus.
For the week, the S&P 500 and the Nasdaq added 0.9% while the Dow rose 0.6%. The Russell 2000 gained 0.7% and needs to clear 1,523 to turn green for the month.