Bulls Power Past Major Resistance

U.S. markets showed continued strength on Thursday following news that U.S. and Chinese trade officials will meet early next month. Chinese Vice Premier Liu He agreed to a visit in early October during a telephone call with U.S. Treasury Secretary Mnuchin and U.S. Trade Representative Lighthizer.

The gains helped the major indexes clear major resistance levels and prior support from late July. Volatility continued to ease after closing below major support levels and is suggesting continued upside ahead of Friday’s jobs report and comments from Fed Chairman Powell.

The Nasdaq zoomed 1.8% after testing a morning high of 8,134 and closing back above the 50-day moving average. Prior and lower resistance at 8,100-8,150 was cleared and held with a move above the latter getting 8,200-8,250 in play.

The Russell 2000 rallied 1.8% following the opening run to 1,521 and close back above the 1,500 level. Prior and lower resistance at 1,515-1,530 and the 200-day moving average held with a close above the latter and the 50-day moving average being an ongoing bullish signal.

The Dow surged 1.4% after trading to a 1st half high of 26,836 while also recovering its 50-day moving average. Near-term and lower resistance at 26,800-27,000 was cleared but held with a close above the latter signaling additional strength towards 27,250-27,500.

The S&P 500 soared 1.3% following the intraday push to 2,985 and close back above the 50-day moving average. Early July and lower resistance at 2,975-3,000 was recovered with a move above the latter getting 3,025 and all-time highs in focus.

Technology led sector strength with a gain of 2.1% while Financials and Consumer Discretionary advanced 2% and 1.9%, respectively. Utilities and Real Estate fell 1.1% and 0.9%, respectively, to led sector laggards, while Consumer Staples declined 0.6% to round out the losers.

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Activision Blizzard (ATVI) upgraded to Overweight from Equal Weight at Stephens
Comcast (CMCSA) upgraded to Outperform from Perform at Oppenheimer
National Oilwell (NOV) upgraded to Buy from Hold at Jefferies

BHP Group (BHP) downgraded to Underperform from Neutral at Exane BNP Paribas
Mallinckrodt (MNK) downgraded to Market Perform from Outperform at BMO Capital
Yirendai (YRD) downgraded to Underperform from Neutral at Macquarie

Before the open: Brady (BRC), Genesco (GCO), Tsakos Energy Navigation (TNP)
After the close: None

Friday’s economic reports (EST): 
Employment Report - 8:30am
Quarterly Services Survey - 10:00am
Baker-Hughes Rig Count - 1:00pm
Fed Chairman Powell Speaks - 12:30pm

Gold closed at $1,525.50 an ounce, down $34.90
Silver settled at $18.81 an ounce, down $0.74
Copper finished at $2.64 a pound, up $0.04
Crude Oil was at $56.24 a barrel, up $0.26
Bitcoin Investment Trust (GBTC) ended at $12.85, down $0.32

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

   Todd Mitchell

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