10-31-2018 Todd’s Market Update

Bulls Get Back-to-Back Wins


U.S. markets wrapped up a volatile month with the S&P 500 and Nasdaq closing higher in back-to-back sessions for the first time since September. The recent rebound is signaling a possible near-term bottom is in but the rest of the week has a number of high profile earnings due out.

The longer-term technical outlook remains slightly bearish but the major indexes could follow the Dow’s lead in making a run towards their 200-day moving averages on continued strength. 


Volatility is showing signs of easing but remains just above an uncomfortable level for the bulls.


The Nasdaq surged 2% while testing a session high of 7,368. Fresh resistance at 7,350-7,400 held with a close above the latter being a continued bullish signal.

The S&P 500 jumped 1.1% after trading to a second half high of 2,736. Fresh and lower resistance at 2,735-2,750 held with continued closes above the latter being a more bullish development.

For October, the Nasdaq was the worst-performing major index, dropping 9.2% and its biggest monthly loss since November 2008. The S&P 500 shed 6.9% for its biggest monthly decline since September 2011.

The Dow was higher by 1% following the intraday push to 25,336. Near-term resistance at 25,350-25,400 and the 200-day moving average were held by the bears with a close above the latter signaling additional strength.

The Russell 2000 added 0.3% after reaching a morning peak of 1,526. Near-term resistance at 1,525-1,535 held with a close above 1,540 being a more bullish signal.

The Russell 2000 tanked 11% while the Dow sank 5.1% in October for its biggest monthly percentage fall since January 2016.

Technology and Communication Services were the strongest sectors after rallying 2.4% and 2.1%. Financials and Materials advanced 1.4%.

Real Estate and Utilities were down 1.4% and 1.2%, respectively, and were the weakest sectors. Consumer Staples was off 1% to round out the losers.

For October, Utilities and Consumer Staples were the only positive sectors after rising 3.2% and 3%. Energy plummeted 11.9% while Industrials were hammered for an 11.5% loss. Consumer Discretionary plunged 11.3%, Materials were hit for 10.4%, and Technology tanked 10.1% to round out the double-digit percentage losers.


ANALYST UPGRADES/DOWNGRADES

Comerica (CMA) upgraded to Strong Buy from Outperform at Raymond James
Denny's (DENN) upgraded to Overweight from Equal Weight at Stephens
Eli Lilly (LLY) upgraded to Neutral from Underperform at Credit Suisse

Clovis (CLVS) downgraded to Neutral from Overweight at JPMorgan
Qualcomm (QCOM) downgraded to Neutral from Buy at BofA/Merrill
Weatherford (WFT) downgraded to Neutral from Buy at Guggenheim


EARNINGS

Thursday's earnings announcements (EST): 

Before the open: ​Aircastle (AYR), Ball (BLL), Cigna (CI), Dominion Energy (D), Exelon (EXC), Gartner (IT), GasLog (GLOG), Generac Holdimgs (GNRC), HanesBrands (HBI), Insperity (NSP), InterDigital (IDCC), iStar (STAR), LendingTree (TREE), Madison Square Garden (MSG), MGM Growth Properties (MGP), NetScout Systems (NTCT), New York Times (NYT), Oshkosh (OSK), Penn National Gaming (PENN), Pitney Bowes (PBI), Quanta Services (PWR), Radius Health (RDUS), Sealed Air (SEE), Sotheby’s Holdings (BID), Teleflex (TFX), TreeHouse Foods (THS), Veeco Instruments (VECO), Wayfair (W), Zoetis (ZTS)

After the close: ​Alleghany (Y), Apple (AAPL), Bovie Medical (BVX), Cardtronics (CATM), CBS (CBS), El Pollo Loco Holdings (LOCO), EOG Resources (EOG), Fluor (FLR), GoPro (GPRO), Host Hotels & Resorts (HST), Kaman (KAMN), Kraft Heinz (KHC), Live Nation Entertainment (LYV), Metlife (MET), Motorola Solutions (MSI), Pixelworks (PXLW), Rogers (ROG), Shake Shack (SHAK), Starbucks (SBUX), Trimble Navigation (TRMB), United States Steel (X), Viavi Systems (VIAV), Weight Watchers International (WTW), Western Union (WU)



UPCOMING ECONOMIC NEWS
Thursday's Economic Reports (EST):
Challenger Job-Cut Report - 7:30am
Jobless Claims - 8:30am
Productivity and Costs - 8:30am
PMI Manufacturing Index - 9:45am
ISM Manufacturing Index - 10:00am
Construction Spending - 10:00am


METALS / OIL

Gold closed at $1,215.00 an ounce, down $10.30
Silver settled at $14.28 an ounce, down $0.18

Copper finished at $2.66 a pound, unchanged

Crude Oil is at $64.91 a barrel, down $1.27

Bitcoin Investment Trust (GBTC) ended at $6.74 up $0.08



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

   Todd Mitchell

Bulls Get Back-to-Back Wins

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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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