Small-Caps Tap Fresh Low

U.S. markets traded in a tighter range on Thursday and showed some strength following better-than-expected economic news ahead of and after the open. News that Presidents Xi and Trump are communicating by phones and letters provided some relief ongoing trade talks are continuing with China's Foreign Ministry confirming hopes to resolve trade disputes via negotiations.

The late day weakness was a result of the major indexes failing to hold near-term resistance levels and comes ahead of recent selling pressure on Friday’s and ahead of the weekends. Monday’s have been weak as well in recent weeks and if the pattern continues, fresh multi-month lows will be in play.

The Dow was up 0.4% following the run to 25,639 while failing to hold key resistance at 25,600 and the 200-day moving average into the close. The 2nd-half backtest to 25,339 breached but held near-term and upper support at 25,400 with a close below this level opening downside risk towards 25,200-25,000.

The S&P 500 was higher by 0.3% despite failing to hold prior resistance at 2,850 on the pop to 2,856 shortly after the open and into the closing bell. The intraday pullback to 2,825 held major support at 2,825 by a half-point with a move below this level getting 2,800 and the 200-day moving average in play.

The Nasdaq was lower for the 4th time in 5 sessions after slipping 0.1% and failing to hold resistance at 7,800 on the opening run to 7,805. Near-term and upper support at 7,750-7,700 was breached but held on the late day fade to 7,716 afterwards with a close below the latter signaling additional selling pressure towards 7,650-7,600 and the 200-day moving average.

The Russell 2000 gave back 0.4% following the tumble to 1,456 and fresh multi-month intraday low. Major support at 1,460 held for the 2nd-straight session with risk to 1,450-1,435 and mid-January levels on a close below this level.

Consumer Staples and Real Estate led sector strength with gains of 1.5% while Utilities added 1.3%. Energy led sector laggards for the 2nd-straight session after giving back 0.6% while Consumer Discretionary and Technology were down 0.2%.


Essex Property Trust (ESS) upgraded to Buy from Neutral at BTIG
Pinterest (PINS) upgraded to Buy from Hold at Argus
Levi Strauss (LEVI) upgraded to Buy from Neutral at BofA/Merrill

Abeona Therapeutics (ABEO) downgraded to Hold from Buy at Maxim
Evergy (EVRG) downgraded to Market Perform from Outperform at Wells Fargo
Host Hotels (HST) and Pebblebrook Hotel (PEB) downgraded to Neutral from Buy at BTIG

Before the open: ​​​​Deep Down (DPDW), Deere & Company (DE), Golden Ocean Group (GOGL), GreenTree Hospitality Group (GHG), MSG Networks (MSGN), Nordic American Tanker (NAT), Qudian (QD)

After the close: ​​​None

Friday’s economic reports (EST): 
Quarterly Services Survey - 10:00am
Consumer Sentiment - 10:00am
Baker-Hughes Rig Count - 1:00pm

Gold closed at $1,531.20 an ounce, up $3.40
Silver settled at $17.21 an ounce, down $0.07
Copper finished at $2.59 a pound, Unchanged 
Crude Oil was at $54.61 a barrel, down $0.44
Bitcoin Investment Trust (GBTC) ended at $12.71, up $0.43

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

   Todd Mitchell

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