Market Update 10-14-19/ Join Now!

Bulls Snap 3-Week Losing Streak

8:00am (EST)

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.

6 Month – $462

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.

Watching the VIX…

The S&P 500 Volatility Index ($VIX) surged to an midday high of 22.71. Prior and upper resistance at 22-22.50 was breached but held. Continued closes above the latter could lead to a retest towards 24.50-25 with the monthly peak at 24.81.

Rising support at 21.50 followed by 20.50-20.

sc.png

TLT at All-Time High

The iShares 20+ Year Treasury Bond ETF (TLT) resumed its parabolic run after zooming to $145.73 and another fresh all-time high. Blue-sky and lower resistance at $145-$145.50 was cleared and held. Continued closes above the latter could lead to upside potential towards $147-$147.50.

Rising and near-term support is at $145-$144.50. A close below $144 could lead to a quick backtest towards $142.50-$142.

sc.png

Sector Update (XLI)

The Industrials Select Sector Spider (XLI) fell for the 4th-straight session despite tapping an intraday low of $73.08. Mid-May and upper support at $73.50-$73 was triggered but held. A close below the latter and the 200-day moving average reopens risk towards $72-$71.50 with the beginning of June low at $71.91.

Lowered resistance is at $74-$74.50. Continued closes above $75 and prior resistance from early June would be a more bullish signal for a rebound towards $75.50-$76.25 and the 50-day moving average that still remains in a slight uptrend.

RSI was able to hold major and late May support at 30. A close below this level would signal additional weakness towards 25-20 with the latter representing the late October and December 2018 low. Resistance is at 35-40.

sc.png

S&P 400 Mid Cap Index ($MID) in a Trading Range

The S&P 400 Mid Cap Index ($MID) has been in a 6-session trading range with Monday’s high reaching 1,908. Near-term and lower resistance at 1,900-1,925 was cleared and held with a close above the latter and the 50-day moving average being a more bullish signal for higher highs.

Near-term support is at 1,875-1,850 and the 200-day moving average. A close below the 1,850 level would be a bearish development with risk towards 1,825-1,800 and late May lows.

RSI has been flatlining with resistance at 55. A move above this level would signal additional strength with upside potential towards 60-65 and the latter representing the April high. Support is at 50-45 with a move below the latter signaling additional weakness.

sc.png

Russell 3000 Index ($RUA) Update 5/18/19

The Russell 3000 Index ($RUA) had its 3-session winning streak snapped following the pullback to 1,682 into the closing bell. Upper support at 1,680-1,665 held on the close back below the 50-day moving average. A move below the latter opens up risk towards 1,650-1,635 and the 200-day moving average.

Resistance is at 1,690-1,705 with last week’s peak reaching 1,704. Continued closes above the 1,700 level keeps upside potential towards 1,710-1,725 in play.

RSI is in a slight downtrend with support at 45-40. A move below the latter reopens risk towards 35-30 with the latter representing the monthly bottom. Resistance is at 50 with a move back above this level signaling a return of strength and a possible run towards 55-60.

sc.png