10-28-2018 Todd’s Market Update

Bears Stay Aggressive During October Correction

U.S. markets wrapped up a volatile week with fresh monthly lows as corporate earnings and continued trade rhetoric weighed on sentiment. Larry Kudlow, head of President Trump's National Economic Council, accused China of refusing to engage on trade issues.

Chinese officials are said to be bracing for a prolonged fight and are focusing on adapting to a new normality in relations. Meanwhile, volatility continues to stay elevated with a bullish technical pattern in process and still a major warning signal for the market.

The Nasdaq sank 2.1% while tapping a low of 7,057. Early May support at 7,100-7,000 was split with both levels holding into the closing bell.

The Russell 2000 fell 1.1% following the morning fade to 1,459. February and upper support at 1,460-1,450 was breached with risk to 1,425 on continued weakness.

Tech was down 3.8% for the week while the small-caps gave back 3.9%.

The S&P 500 was off 1.7% after bottoming at 2,628 on Friday. Late April and upper support at 2,625-2,600 held with risk to 2,550 and February lows on a move below the latter.

The Dow dropped 1.2% after sinking to a first half low of 24,445. Lower support from late June at 24,500-24,250 was breached with both levels holding into the close.

For the week, the S&P 500 tanked 3.9% and the Dow was hit for a 3% loss.

There was no sector strength on Friday. Consumer Discretionary led sector weakness after plummeting 3.1%. Communication Services and Real Estate declined 2.7% and 2.6%, respectively.

For the week, Consumer Staples and Real Estate rallied 2.6% while Utilities rose 1.2% to round out the winners. Energy was slammed for 7.2% while Industrials were punished for 5% and were the biggest losers.

ANALYST UPGRADES/DOWNGRADES

​GrubHub (GRUB) upgraded to Conviction Buy from Buy at Goldman Sachs
Six Flags (SIX) upgraded to Neutral from Underperform at Macquarie with
Twitter (TWTR) upgraded to Outperform from Perform at Oppenheimer

​Colgate-Palmolive (CL) downgraded to Hold from Buy at SunTrust
Kraton (KRA) downgraded to Hold from Buy at SunTrust
Western Digital (WDC) downgraded to Neutral from Buy at Longbow


EARNINGS

Monday's earnings announcements (EST): 

Before the open: ​Alliance Resource Partners (ARLP), Bloomin’ Brands (BLMN), Cooper Tire & Rubber (CTB), Dana Holding (DAN), First Data (FDC), Mercury General (MCY), Stoneridge (SRI), Tower International (TOWR), Yandex (YNDX)

After the close: 8x8 (EGHT), Akamai Technologies (AKAM), Blackbaud (BLKD), Chegg (CHGG), EPR Properties (EPR), FTS International (FTSI), Harmonic (HLIT), KLA-Tencor (KLAC), Mondelez International (MDLZ). Nautilus (NLS), QCR Holdings (QCRH), Rambus (RMBS), TimKen (TKR), UDR (UDR), Vornado Realty Trust (VNO), Wingstop (WING)



UPCOMING ECONOMIC NEWS
Monday's Economic Reports (EST):
Personal Income and Outlays - 8:30am
Dallas Fed Manufacturing Survey - 10:30am


METALS / OIL

Gold closed at $1,235.80 an ounce, up $3.40
Silver settled at $14.70 an ounce, down $0.07

Copper finished at $2.74 a pound, down $0.01

Crude Oil is at $667.62 a barrel, up $0.64

Bitcoin Investment Trust (GBTC) ended at $6.97 down $0.07



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

   Todd Mitchell

Bears Stay Aggressive During October Correction

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About the Author Todd Mitchell

Todd Mitchell is the CEO & Founder of Trading Concepts, Inc. He's been trading since 1994 and has mentored over 12,000 traders from Wall Street to Main Street. He's an expert at developing strategies for creating more consistent daily, weekly and monthly income.

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