Near-term Resistance Holds on Slight Bounce


U.S. markets showed overall strength for the first time in 5 sessions following Tuesday’s push to prior resistance levels as Turkey’s currency meltdown showed signs of steadying. The Turkish Lira rallied nearly 5% against the green-back following parabolic drops to historic lows against the U.S. dollar.

News of a possible trade deal between the U.S. and Mexico also helped fuel the rebound along with another solid report on business optimism.

Volatility sank nearly 10% but remains slightly elevated after key support levels held into the closing bell.

The Russell 2000 surged 1% while making a midday run just south of 1,695. The move back above the 50-day moving average was a bullish development and keeps fresh resistance at 1,700-1,710 and all-time highs in play.

The Nasdaq was higher by 0.7% after testing to an intraday peak of 7,888. Lower resistance at 7,875-7,900 held with a close above the latter being a bullish signal.

The S&P 500 added 0.6% following the push to 2,843 for the 2nd-straight session. Resistance at 2,850 stood tall with continued closes above this level signaling a possible near-term bottom.

The Dow advanced 0.5% after trading to a late session high of 25,339. Upper resistance at 25,200-25,400 held with the close above the latter being a slightly bullish signal.

Consumer Discretionary and Financials rallied 0.9% to lead sector strength. Materials added 0.8% while Communication Services and Industrials were up 0.7%.

There were no sector laggards.


Commercial Metals (CMC) upgraded to Neutral from Sell at Goldman Sachs DCP Midstream (DCP) upgraded to Buy from Hold at Stifel

JinkoSolar (JKS) upgraded to Neutral from Sell at Citi

Chubb (CB) downgraded to Sell from Hold at Deutsche Bank

Switch (SWCH) was downgraded to Market Perform from Outperform at Raymond James

Urban Outfitters (URBN) downgraded to Neutral from Outperform at Baird



Wednesday’s Earnings Announcements:

Before the open: Luxhoft Holding (LXFT), Macy’s (M), MSG Networks (MSGN), Performance Food Group (PFGC), Staffing 360 Solutions (STAF)

After the close: Briggs & Stratton (BGG), Caci International (CACI), Cisco Systems (CSCOWealth Strength IndexAAPL is Extremely Up and trending Up), NetApp (NTAP), SpartanNash Company (SPTN)



Wednesday’s economic reports (EST):

MBA Mortgage Applications – 7:00am

Retail Sales – 8:30am

Productivity and Costs – 8:30am

Empire State Manufacturing Survey – 8:30am

Industrial Production – 9:15am

Atlantic Fed Business Inflation Expectations – 10:00am

Business Inventories -10:00am

Housing Market Index – 10:00am