Bulls Keep Momentum Ahead of Last Trading Day for August

U.S. markets showed continued strength on Thursday following news that China will refrain from retaliating to the extra 5% tariff on $300 billion in Chinese goods imports. Additionally, China's commerce ministry said September trade talks are still on the table and that the U.S. and Beijing have maintained effective communication on trade.

The mini breakout helped the major indexes push the tops of the month-long trading ranges but are still showing losses of roughly 2% for August with the small-caps down 5%. Volatility eased for the 2nd-straight session but remains slightly elevated ahead of the upcoming 3-day weekend with a bearish technical outlook heading into September.

The Russell 2000 zoomed 1.6% following the second half run to 1,498. Mid-month and lower resistance at 1,500-1,515 was challenged but held with a close above the latter and the 200-day moving average signaling additional strength towards 1,530-1,545 and the 50-day moving average.

The Nasdaq surged 1.5% after reaching a late session high of 7,992. Near-term and lower resistance at 7,950-8,000 was cleared and held with a close above 8,050 and the 50-day moving average being a more bullish signal for a trip towards 8,100-8,150.

The S&P 500 soared 1.3% following the intraday push to 2,930 and close back above the 2,900 level. Current and lower resistance at 2,925-2,950 was cleared but held by a half-point with a move above the latter and the 50-day moving average signaling additional strength towards 2,975-3,000.

The Dow also jumped 1.3% after testing a midday peak of 26,408 while closing above the 26,000 level for the 2nd-straight session. Prior and lower support at 26,400-26,600 was cleared but held with a close above the latter and the 50-day moving average getting 26,750-27,000 back in focus.

Technology and Industrials led sector strength after rallying 1.7% while Communication Services gained 1.6%. There was no sector weakness.

The market is closed on Monday and our next update will be Tuesday morning.

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ANALYST UPGRADES/DOWNGRADES

Jabil (JBL) double upgraded to Buy from Sell at Citi
NextGen Healthcare (NXGN) upgraded to Sector Weight from Underweight at KeyBanc
Tallgrass Energy (TGE) upgraded to Neutral from Underperform at BofA/Merrill

Box (BOX) downgraded to Neutral from Outperform at First Analysis
Casey's General Stores (CASY) downgraded to Underperform from Sector Perform at RBC Capital
Tapestry (TPR) and Movado (MOV) downgraded to Market Perform from Outperform at Cowen

FRIDAY'S EARNINGS ANNOUNCEMENTS  
Before the open: AAC Holdings (AAC), Big Lots (BIG), Campbell Soup (CPS), Fang Holdings (SFUN), JinkoSolar Holding (JKS), Yintech Investment (YIN)
After the close: None

UPCOMING ECONOMIC NEWS
Friday’s economic reports (EST): 
Personal Income and Outlays - 8:30am
Chicago PMI - 9:45am
Consumer Sentiment - 10:00am
Baker-Hughes Rig Count - 1:00pm
Farm Prices - 3:00pm


METALS / OIL
Gold closed at $1,536.90 an ounce, down $12.20
Silver settled at $18.32 an ounce, down $0.14
Copper finished at $2.58 a pound, up $0.02 
Crude Oil was at $56.83 a barrel, up $0.91
Bitcoin Investment Trust (GBTC) ended at $11.60, down $0.26


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


   Todd Mitchell


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