U.S. markets continued their v-shape recovery off the late December lows as the major indexes closed mostly higher on Tuesday. Optimism surrounding the Fed’s monetary policy following a dinner between Fed Chair Powell and President Trump helped furl the gains.
Powell said he did not discuss expectations for monetary policy, except to stress that the path of policy would depend entirely on economic data.
Near-term overbought levels are starting to come into play as the major indexes have recovered 2/3rd’s of the losses off the December bottom. However, it is important to remember markets can stay overbought for weeks and even months as long as near-term support levels hold.
The Nasdaq closed higher for the 4th time in 5 sessions after rising 0.7% while testing an intraday high of 7,408. Upper resistance at 7,350-7,400 was cleared and held to keep 7,450 and the 200-day moving average in focus.
The Dow was also up 0.7% following the second half push to 25,427. Lower resistance at 25,250-25,500 was cleared and held with a close above the latter possibly leading to a run towards 25,750-26,000.
The S&P 500 rose 0.5% after reaching a peak of 2,738 ahead of the closing bell. Lower resistance at 2,725-2,750 was cleared and held with a close above the latter and the 200-day moving average being a continuing bullish signal.
The Russell 2000 edged up 0.2% following the morning push to 1,524. Fresh and lower resistance at 1,525-1,535 held for the 2nd-straight session with a move above the latter keeping 1,550-1,560 in play.
Communication Services rallied 1% to led sector strength. Consumer Discretionary and Technology added 0.9% and 0.8%, respectively.
Financials gave back 0.2% to pace sector laggards. Healthcare and Consumer Staples were lower by 0.1% to round out the losers.
Covanta (CVA) upgraded to Buy from Neutral at Goldman Sachs
Nine Energy Services (NINE) upgraded to Buy from Hold at Tudor Pickering
Regenxbio (RGNX) upgraded to Strong Buy from Outperform at Raymond James
Equifax (EFX) downgraded to Hold from Buy at Deutsche Bank
Kraft Heinz (KHCWealth Strength IndexKHC is Moderately Flat and trending Up) downgraded to Hold from Buy at Deutsche Bank
Rent-A-Center (RCII) downgraded to Neutral from Buy at Janney Montgomery Scott
Wednesday Before the Open (EST):
Boston Scientific (BSX), Cummins (CMI), Eli Lilly (LLY), First Data (FDC), General Motors (GM), Humana (HUM), Jacobs Engineering (JEC), Malibu Boats (MBUU), New York Times (NYT), Peabody Energy (BTU), Spire (SR), Take-Two Interactive Software (TTWO), Travelzoo (TZOO), Walker & Dunlop (WD)
Wednesday After the Close (EST): Apollo Investment (AINV), Blackbaud (BLKB), Chipotle Mexicam Grill (CMG), ePlus (PLUS), FireEye (FEYE), GoPro (GPRO), iRobot (IRBT), Knoll (KNL), Match Group (MTCH), NetGear (NTGR), OraSire Technologies (OSUR), Rayonier (RYN), Sonos (SONO), Trimble Navigation (TRMB), Valvoline (VVV), Zynga (ZNGA)
UPCOMING ECONOMIC NEWS
Wednesday’s Economic Reports (EST):
MBA Mortgage Applications – 7:00am
Productivity and Costs – 8:30am
International Trade in Goods – 8:30am
METALS / OIL
Gold closed at $1,319.20 an ounce, down $0.10
Silver settled at $15.84 an ounce, down $0.05
Copper finished at $2.81 a pound, up $0.02
Crude Oil is at $53.72 a barrel, down $1.00
Bitcoin Investment Trust (GBTC) ended at $3.90, down $0.06
I hope this helps you prepare for the trading day. Make it a great one!