Small-Caps Shining, Blue-Chips Maintain Momentum

U.S. markets opened with slight gains on Monday after Treasury Secretary Steven Mnuchin said he takes it as a sign of good faith by China that officials will restart trade talks in early October and that his objective is getting a good deal for American workers and companies.

Mnuchin also reiterated President Trump is willing to continue with tariffs on Chinese goods if there's no deal, while adding he didn't see signs of a U.S. recession. The slight momentum faded in the afternoon as the major indexes held a tight range into the close before settling slightly mixed with the small-caps showing strength.

The Russell 2000 rallied 1.3% after holding positive territory throughout the session while tapping a morning high of 1,526. Lower resistance at 1,515-1,530 and the 200-day moving average was cleared and held for the time in 3 sessions with a close above the latter and the 50-day moving average signaling strength towards 1,545-1,560.

The Dow edged up 0.1% to extend its winning streak to 4-straight sessions following the intraday push to 26,900. Near-term and lower resistance at 26,800-27,000 was cleared for the 3rd-straight session and held with a close above the latter keeping 27,250-27,500 and all-time highs in play.

The Nasdaq gave back 0.2% after stalling at 8,131 and failing near-term resistance at 8,150 on the open. Current and upper support at 8,050-8,000 and the 50-day moving back held on the pullback to 8,052 with risk towards 7,900-7,850 on a close below the 8,000 level.

The S&P 500 slipped just a quarter-point, or 0.01%, to snap a 3-session winning streak after trading in a 20-point range. Lower resistance at 3,000-3,025 held on the 1st half high of 2,989 with a close below 2,950 and the 50-day moving average signaling near-term caution.

Energy and Financials were sector standouts after surging 2% and 1.5%, respectively. Consumer Discretionary were up 0.4% while Communications Services and Industrials rounded out the winners after advancing 0.3%.

Healthcare stumbled 0.9% to pace sector weakness while Technology and Real Estate were down 0.8%.

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Chipotle (CMG) upgraded to Outperform from Neutral at Wedbush
Genesco (GCO) upgraded to Buy from Hold at Pivotal Research
Las Vegas Sands (LVS) upgraded to Buy from Hold at Deutsche Bank

E-Trade (ETFC) downgraded to Market Perform from Outperform at Keefe Bruyette
Diamond Offshore (DO) downgraded to Hold from Buy at Pareto
Fox (FOXA) downgraded to Underperform from Neutral at Macquarie

Before the open: Christopher & Banks (CBKC), Francesca’s Holdings (FRAN), HD Supply Holdings (HDS)
After the close: Dave & Buster’s Entertainment (PLAY), Farmer Brothers (FARM), GameStop (GME), Lantronix (LTRX), RH (RH), Verus International (VRUS), Zscaler (ZS)

Tuesday’s economic reports (EST): 
NFIB Small Business Optimism Index - 6:00am
Redbook - 8:55am
Jolts - 10:00am

Gold closed at $1,511.10 an ounce, down $4.40
Silver settled at $18.17 an ounce, up $0.05
Copper finished at $2.63 a pound, unchanged
Crude Oil was at $58.02 a barrel, up $1.29
Bitcoin Investment Trust (GBTC) ended at $12.29, down $0.36

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

   Todd Mitchell

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