Bulls Hold Near-Term Support

U.S. markets showed some strength at the start of Thursday’s action following better than expected economic news ahead of the open. The slight momentum faded shortly afterwards with the major indexes turning south on Fedspeak while trading in tight ranges into the closing bell.

The overall market pullback held near-term support levels with volatility easing to lower levels. Friday’s earnings from a number of banking stocks will likely set the tone for how the week winds up and next week begins.

The Russell 2000 was lower by 0.2% after testing an intraday low of 1,577. Upper support at 1,575-1,560 and the 200-day moving average held with risk towards 1,550 and the 50-day moving average on a move below the latter.

The Nasdaq was also off 0.2% following the back-test to 7,935. Rising support at 7,925-7,875 held with a move below 7,850 now signaling a possible near-term top.

The Dow was down 14 points, or 0.05%, following the intraday pullback to 26,062. Near-term and major support at 26,000 held with a move below the latter opening up risk towards 25,750 and the 50-day moving average.

The S&P 500 nudged up a tenth-point after trading in a 12-point range and testing an intraday low of 2,881. Upper support at 2,875-2,850 easily held with a move below the latter being a bearish signal.

Industrials and Financials led sector strength after gaining 0.9% and 0.6%, respectively. Utilities rose 0.5%.

Healthcare was the worst performing sector after tanking 1.2%. Technology, Real Estate and Materials fell 0.1% to round out the laggards.

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CMS Energy (CMS) upgraded to Buy from Neutral at BofA/Merrill
Five Below (FIVE) upgraded to Overweight from Neutral at JPMorgan
Hawaiian Holdings (HA) upgraded to Outperform from Neutral at Macquarie

Chipotle (CMG) downgraded to Hold from Buy at Jefferies
Eli Lilly (LLY) downgraded to Neutral from Buy at Guggenheim
Keurig Dr Pepper (KDP) downgraded to Underweight from Equal Weight at Morgan Stanley

Before the open (EST):
First Republic Bank (FRC), Infosys Technologies (INFY), PNC Bank (PNC), Wells Fargo (WFC)

After the close(EST):

Friday’s economic reports (EST): 
Import and Price Index - 8:30am
Consumer Sentiment - 10:00am
Baker-Hughes Rig Count - 1:00pm

Gold closed at $1,293.30 an ounce, down $20.60
Silver settled at $14.87 an ounce, down $0.38
Copper finished at $2.88 a pound, down $0.04
Crude Oil was at $64.42 a barrel, unchanged
Bitcoin Investment Trust (GBTC) ended at $6.66 down $0.66

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

   Todd Mitchell

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