Bulls Eyeing 50-Day Moving Averages

​U.S. markets showed strength for a 3rd-straight session as U.S. and China trade talks resumed for a second day. Comments from both sides have expressed cautious optimism that a deal can be reached ahead of the March 1st deadline.

Reports say both sides are making progress on narrowing the differences on trade issues, especially on purchases of U.S. goods and services and widening access to China’s markets. Although the two sides are likely far from striking a deal, the developments remain bullish for market sentiment.

The Russell 2000 jumped 1.5% after closing at its session high of 1,426. Major support from November at 1,425 was cleared and held with continued closes above this level leading to a possible run towards 1,450-1,465 and the 50-day moving average that is showing signs of leveling out.

The Nasdaq advanced 1.1% following the intraday push to 6,909 while closing 3 points below the 6,900 level. Fresh and lower resistance at 6,900-6,950 was breached but held with a move above the latter getting 7,000-7,050 and the 50-day moving average in play.

The S&P 500 gained 1% after tapping a session high of 2,579 while closing above the 2,550 level for the first time since mid-December. Continued closes above this level keeps 2,575-2,600 on the radar with additional hurdles at 2,625-2,650 and the 50-day moving average.

The Dow rose 1.1% following the morning test to 23,864. Fresh and lower resistance at 23,800-24,000 was breached but held with a close above the latter getting 24,250-24,500 and the 50-day moving average in focus.

Real Estate and Communication Services led sector strength with both adding 1.7%. Industrials and Utilities were up 1.4% and 1.3%, respectively.

The were no sector laggards.

ANALYST UPGRADES/DOWNGRADES
Cheesecake Factory (CAKE) upgraded to Outperform from Market Perform at Raymond James
Monster Beverage (MNSTWealth Strength IndexMNST is Moderately Flat and trending Down) upgraded to Buy from Hold at SunTrust
Voya Financial (VOYA) upgraded to Buy from Neutral at Goldman Sachs

Unilever (UN, UL) downgraded to Neutral from Buy at UBS
General Dynamics (GD) downgraded to Hold from Buy at Jefferies
JPMorgan (JPM) downgraded to Hold from Buy at Jefferies

EARNINGS
Wednesday Before the Open (EST):
​Acuity Brands (AYI), Constellation Brands (STZ), Greenbrier Companies (GBX), Lennar (LEN), Plug Power (PLUG), Schnitzner Steel Industries (SCHN)

Wednesday After the Close (EST): Bed, Bath & Beyond (BBBY), Franklin Covey (FC), KB Home (KBH), PriceSmart (PSMT), Richardson Electronics (RELL), Simulations Plus (SLP), Voxx International (VOXX), WD-40 (WDFC)

​UPCOMING ECONOMIC NEWS
Wednesday’s Economic Reports (EST):
MBA Mortgage Applications – 7:00am
FOMC Minutes – 2:00pm

METALS / OIL

Gold closed at $1,285.90 an ounce, down $4.00
Silver settled at $15.71 an ounce, down $0.05
Copper finished at $2.65 a pound, up $0.02
Crude Oil is at $49.69 a barrel, up $1.06
Bitcoin Investment Trust (GBTC) ended at $4.96,
up $0.10

I hope this helps you prepare for the trading day. Make it a great one!

Todd Mitchell