Market Action summary: 7/30/18

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S&P 500 overview: Hits resistance at January downgap

  • Failed breakout → Risk of bearish phase.
  • SPX bearish harami on Thursday, July 26.
  • Remember we’ve been up 4 straight weeks.
  • 2700 may be key level on SPX: Trendline, pivot, 100DMA

Earnings in focus:

  • This morning: Caterpillar (CAT)
  • As we speak: KLA-Tencor (KLAC)
  • 7/31: Pfizer (PFE)
  • 7/31: Archer Daniels Midland (ADM)
  • 7/31: Huntsman (HUN)
  • Click here for last week’s earnings recap.

Glass half empty?

  • Fed meeting, jobs data may kill Goldilocks. Powell ahead of the curve?
  • Factset: On pace for best earnings season in terms of beating estimates since at least 2008. EPS growth rates revised up for all nine sectors.
  • Stronger GDP not necessarily bullish for S&P 500.
  • Tech troubles (FB, NFLX, TSLA, INTC) focus for now. No new high in chips since Jan, high-multiple software weakening.
  • Mid-term elections could soon become worry.
  • China checkup: Boosting fiscal stimulus as electricity consumption slows. Click here for our special report.

Options activity:

Charts to watch

  • ORCL, RHT downside risk in tech.
  • MNST potentially rolling over after drop.
  • BABA, BIDU at risk of bigger breakdowns, but not confirmed yet.
  • Refiners, energy may have most upside. Watch WLL for earnings tomorrow night, Iran news August 6.
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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly 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 appraised 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.