Bulls Get Weekly Win Despite Friday’s Volatility

stock market

U.S. markets closed lower on Friday despite another strong jobs report as the news worried Wall Street that a possible rate cut later this month might not happen. While the overall action was slightly bearish, the major indexes closed well off the lows into the close with near-term support levels easily holding on the morning pullback.

The small-caps actually showed strength that led to a mixed close but volatility was heightened after trading in a much wider range. The lighter holiday volume likely had an impact on the VIX with this week’s Fed speak and the start of 2Q earnings season leading to a further breakdown, or breakout, for the index.

The S&P 500 was lower by 0.2% following the pullback to 2,969 shortly after the opening bell, snapping a 5-session winning streak. Near-term and upper support at 2,975-2,950 was breached but held with a close below the latter signaling additional weakness.

The Dow fell for the first time in 5 sessions after also giving back 0.2% while testing a first half low of 26,733. Near-term and upper support at 26,750-26,500 was tripped but easily held with a move below the latter likely leading to a further backtest towards 26,250-26,000 and the 50-day moving average.

The Nasdaq had its 6-session winning streak halted after slipping 0.1% while trading to a morning low of 8,093. Fresh and upper support at 8,100-8,050 was breached but held with a close below the 8,000 level signaling a possible near-term top.

The Russell 2000 closed in positive territory for the 2nd-straight session after adding 0.2% while closing on its session peak of 1,575. Current and lower resistance at 1,575-1,590 was cleared and held with a move above the latter getting 1,600-1,620 in focus.

For the week, the Nasdaq jumped 2% while the Russell 2000 was up 0.6%. The S&P 500 soared 1.7% and the Dow rallied 1.2%.

Financials paced sector strength after rising 0.4% while Energy, Consumer Discretionary, and Communication Services edged up 0.1% to round out the winners. Healthcare and Real Estate led sector laggards after falling 0.7% and 0.6%, respectively.

The best performing sectors over the past week have been Real Estate (4.3%) and Financials (4.1%). The only laggard has been Energy (-0.7%).

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ANALYST UPGRADES/DOWNGRADES

Teva (TEVA) upgraded to Buy from Hold at Argus
BASF (BASFY) initiated with a Neutral at Goldman Sachs

Senseonics (SENS) downgraded to Market Perform from Outperform at Raymond James
Omnova Solutions (OMN) downgraded to Hold from Buy at Deutsche Bank
Mercer (MERC) downgraded to Neutral from Outperformer at CIBC

MONDAY'S EARNINGS ANNOUNCEMENTS  
Before the open:  Azz (AZZ)
After the close: None


UPCOMING ECONOMIC NEWS 
Monday's economic reports (EST): 
TD Ameritrade IMX - 12:30pm
Consumer Credit - 3:00pm

METALS / OIL
Gold closed at $1,400.10 an ounce, down $20.80
Silver settled at $15.00 an ounce, down $0.34
Copper finished at $2.67 a pound, unchanged
Crude Oil was at $57.73 a barrel, up $0.39
Bitcoin Investment Trust (GBTC) ended at $14.67, down $0.03


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


   Todd Mitchell


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