Bulls Rebound off Slightly Oversold Levels

U.S. markets showed strength throughout Tuesday’s session following conciliatory comments from President Trump who said he and President Xi will meet in June at the G20. The market took the comments as a possible sign that President Trump will hold off on additional tariffs for now.

China also indicated the nation does not want a trade war with the U.S. but there were also indications of a prolonged delay. In any event, the major indexes rebound from slightly oversold levels as volatility closed back below a key level of resistance.

The Russell 2000 rallied 1.3% after testing a late session high of 1,547. Near-term and lower resistance at 1,550-1,575 was tapped but held with continued closes back above the latter and the 50/200-day moving averages being a more bullish signal.

The Nasdaq was higher by 1.1% following the second half run to 7,776. Current resistance at 7,750-7,800 was split but held with a move above 7,850 and the 50-day moving average signaling a possible near-term bottom.

The Dow jumped 0.8% to reach an intraday peak of 25,688. Prior and lower resistance at 25,600-25,800 was cleared but held on the close back above the 200-day moving average. A close above 26,000 and the 50-day moving average would be a more bullish development for additional strength.

The S&P 500 also rose 0.8% after reaching a late day peak of 2,852. Near-term and lower resistance at 2,850-2,875 was cleared but held with a close above the latter and the 50-day moving average being a more bullish signal.

Technology led sector leaders after surging 1.6% while Energy and Industrials soared 1.3% and 1.1%, respectively.

Utilities gave back 0.7% and was the only sector laggard.

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Coca-Cola (KO) upgraded to Overweight from Equal Weight at Morgan Stanley
Deckers Brands (DECK) upgraded to Positive from Neutral at Susquehanna
Tyson Foods (TSN) upgraded to Outperform from Neutral at Credit Suisse

Deere (DE) downgraded to Underweight from Neutral at JPMorgan
Insys Therapeutics (INSY) downgraded to Neutral from Buy at Janney Montgomery Scott
Shopify (SHOP) downgraded to Underweight from Equal Weight at Morgan Stanley

Before the open (EST):
​Altimmune (ALT), Charah Solutions (CHRA), Digital Ally (DGLY), Establishment Labs (ESTA), Macy’s (M), Perion Network (PERI), QuoteMedia (QMCI), Stars Group (TSG), Tower Semiconductor (TSEM), Veru (VERU), Windstream Holdings (WINMQ)

After the close(EST):
​Cisco Systems (CSCO), Flower Foods (FLO), Jack in the Box (JACK), Limbach Holdings (LMB), Netease.com (NTES), Payment Data Systems (PYDS), Sorl Auto Parts (SORL), Virtusa (VRTU), ZTO Express (ZTO)

Wednesday's economic reports (EST): 
​MBA Mortgage Applications - 7:00am
Retail Sales - 8:30am
Empire State Manufacturing Survey - 8:30am
Industrial Production - 9:15am
Atlantic Fed Business Inflation Expectations - 10:00am
Housing Market Index - 10:00am
Business Inventories -10:00am

Gold closed at $1,296.30 an ounce, down $5.50
Silver settled at $14.81 an ounce, up $0.03
Copper finished at $2.72 a pound, unchanged
Crude Oil was at $61.38 a barrel, up $0.55
Bitcoin Investment Trust (GBTC) ended at $9.48 down $0.73

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

   Todd Mitchell

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