Consumer Staples Select Spiders (XLP) Worth a Look

Consumer Staples Select Spiders (XLP, $64.85, up $0.55)

XLP September 65 calls (XLP200918C00065000, $0.80, up $0.15)

Entry Price: $0.70 (8/17/2020)

Exit Target: $1.40

Return: 14%

Stop Target: None

Action: Lower resistance at $64.50-$65 was recovered with shares closing on the session high of $64.85. Support remains at $64-$63.50.

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S&P 500 Volatility Index ($VIX) Still Looking to Crack 20

The S&P 500 Volatility Index ($VIX) had its 3-session winning streak snapped despite tagging an opening high of 24.47. Current and lower resistance at 24.50-25 was challenged but held for the 2nd-straight session. A close above the 25 level would suggest further upside towards 27.50-28 and the 200-day/50-day moving averages which just formed a death cross.
 
This technical pattern is typically a bearish development that signals lower lows. This would be, however, a bullish signal for the market and the continued assault on record highs.
 
Near-term and upper support at 22.50-22 was also breached but held on the late day fade to 22.06. A close below the 20 level and the monthly low at 20.28 would be important bullish signals for the market. This would confirm the death-cross pattern for lower lows with additional gap-down and backtest potential towards the 17.50-17 area and levels from late February.

NextOptions.com Index and Earnings Options Play List for 8/17/2020

Bulls Get Weekly Win Despite Friday’s Flat Action

The market lost ground on Friday following a flood of economic news and inaction from Congress on developments for a coronavirus relief package. No deal was announced on that front as lawmakers have broken for recess until Labor Day.

Despite the flat session, the major indexes posted another winning week and remain on track to test old and new higher highs after advancing their winning streaks to 3 and 4 weeks.

The Nasdaq tested a low of 10,972 before finishing at 11,019 (-0.2%). Current support at 11,000 was breached but held with a close below this level indicating additional downside weakness towards the 10,750 area.

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The Dow settled slightly higher despite tapping an intraday low of 27,759 while finishing 27,931 (+0.1%). Key support at 27,750 was challenged but held for the 3rd-straight session with a move below this level getting 27,250 back in focus.

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The S&P 500 traded to a low of 3,361 before ending at 3,372 (-0.02%). Near-term support at 3,350 was challenged but held with a move below this level suggesting further weakness towards the 3,300 area.

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The Russell 2000 closed at 1,577 (-0.1%) after tagging a morning low of 1,567. Crucial resistance at 1,575 was tripped but held with a close below this level suggesting a further pullback towards the 1,550 level. Below is a chart of the IWM.

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Monday’s (8/17/2020) earnings announcements (JD, CWCO, BEST…)

Monday’s (8/17/2020) earnings announcements:

Before the open: Consolidated Water (CWCO), Eagle Point Credit (ECC), Gulf Resources (GURE), JD.com (JD), Milestone Scientific (MLSS), Niu Technologies (NIU), SWK Holdings (SWKH)

After the close: Americas CarMart (CRMT), Best (BEST), China Biologic Products (CBPO), Dolphin Entertainment (DLPN), Edison Nation (EDNT), Fabrinet (FN), Progressive Care (RXMD), Social Reality (SRAX)

Economic News:

NAHB Housing Market Index – 10:00am

Analyst Upgrades/ Downgrades

Analyst Upgrades/ Downgrades
 
Estee Lauder (EL) upgraded to Outperform from Perform at Oppenheimer
Halliburton (HAL) upgraded to Conviction Buy from Buy at Goldman Sachs
Schlumberger (SLB) upgraded to Overweight from Equal Weight at Wells Fargo
 
Baker Hughes (BKR) downgraded to Buy from Conviction Buy at Goldman Sachs
BJ’s Wholesale (BJ) downgraded to Hold from Buy at Deutsche Bank
Deere (DE) was downgraded to Underweight from Neutral at JPMorgan