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Market Insights

Bringing you the trading news around the world.

Goldilocks Could Be Emerging with Fed on Pause: Market Trends

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Downloads are available here. TradeStation’s ideas on TradingView are available here.

Sizing Up the S&P 500

  • S&P 500 rebounds from mid-May weekly support.
  • Current bounce may lead to August low or falling trendline.
  • Several potential levels at play in difficult range-bound environment.
  • 1-2 weeks of consolidation may be needed to break intermediate-term downtrend.
  • 10-year Treasury yield may provide clues on market direction.
S&P 500, daily chart, with key patterns and indicators.

Key News

  • Fed makes little changes in latest meeting.
  • Treasury to increase the size of long-bond auctions slightly less than expected.
  • ADP private sector payrolls grow less than expected, wage increases (changers and stayers) at 2-year lows.
  • October ISM manufacturing misses as orders, employment fall.
  • EIA crude oil inventories rise less than feared. Reuters says refiners are worried about lower gasoline demand.
  • Consumer confidence beat estimates in October for the 1st time since July. Respondents more optimistic about selves than others.
    • Consumer sentiment was also unexpectedly revised up.
  • August Case Shiller home price index rises 1% vs 0.7% estimate.
  • Tom Lee of Fundstrat: Stocks could break “doom loop.”
  • Odds of 12/13 rate hike drop from 29% to 22.5% after Fed meeting.
  • Reuters: INTC, AMD results suggest PC market is recovering
    • Echoes 10/9 report by Gartner
  • Jeffrey Gundlach of DoubleLine Capital sees rates falling as economy slows

Sector Watch

  • REITs rebound, following utility bounce, amid hopes that yields have peaked
  • Homebuilders trying to bounce as yields inch lower
  • Latin American stocks trying to stabilize after August declines
  • Energy continues to lag
  • Precious metals weak despite lower rates. Less fear?

Signals Scan

  • Lululemon Athletica (LULU) holds 50-day MA
  • Palo Alto Networks (PANW) holds 50-day MA
  • Dell Technologies (DELL) holds 50-day MA
  • Occidental Petroleum (OXY) potentially breaking 200-day MA
  • Coca Cola (KO) hits falling 50-day MA 
  • Will crude oil futures (@CL) make a lower low after 10/20 lower high?

Mover of the Week: Deckers Outdoor

  • Maker of UGG, Teva footwear
  • Benefiting from direct-to-consumer model after embracing Google Marketing Platform
  • Jumped to new record high after earnings, sales and guidance beat estimates on 10/26
  • DECK +49% YTD

Upcoming Events

  • Earnings tonight: AAPL, MNST, FTNT
  • Tomorrow (11/3): Non-farm payrolls
  • Next week: Fedspeak resumes
  • Wednesday (11/8): Crude oil inventories

Security futures are not suitable for all investors. To obtain a copy of the security futures risk disclosure statement Investment and Trading Disclosures Booklet – Futures. Exchange Traded Funds (“ETFs”) are subject to management fees and other expenses. Before making investment decisions, investors should carefully read information found in the prospectus or summary prospectus, if available, including investment objectives, risks, charges, and expenses. Click here to find the prospectus.

Options trading is not suitable for all investors. Your TradeStation Securities’ account application to trade options will be considered and approved or disapproved based on all relevant factors, including your trading experience. See Characteristics and Risks of Standardized Options.

About the author

David Russell
David Russell is VP of Market Intelligence at TradeStation Group. Drawing on two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them apprised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.

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