Market Action Summary: 9/17/18


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S&P 500 overview

  • SPX finds support at old resistance. Outside day provides confirmation.
  • Transports have broken out. Only DJIA remains below January peak.
  • Conditions favor individual stocks over indexes.

Don’s Watch List:

  • FedEx (FDX): Reports this afternoon amid strong economy, earnings.
  • Micron Technology (MU): Earnings Thursday night. Has a history of beating estimates and has now given up most of its gains for the year. Good for options.
  • General Mills (GIS): Clawing back from two-year lows amid strong economy.
  • AutoZone (AZO): Reports tomorrow morning amid strong earnings momentum, bullish Wall Street sentiment.
  • Darden Restaurants (DRI): Reports Thursday morning. Near record high amid strong earnings backdrop.

Russell’s Watch List:

  • CSCO has bullish-continuation potential. Good for options.
  • Glu Mobile (GLUU) has bullish-continuation potential.
  • Starbucks (SBUX) downside risk after dojis, hanging man.
  • Square (SQ): Potentially bearish candle today.
  • Defense stocks (RTN, NOC, LMT, GD) potentially coming to life.
  • Cruise ships (RCL, CCL, NCLH) potentially coming to life.
  • Target (TGT) on watch for bullish continuation. Good for options.
  • Watch for Zumiez (ZUMZ), Trinity (TRN), Greenbrier (GBX) for swings higher.
  • Will Florence hurt restaurants/airlines, but help automakers?

Options Corner:

  • GPRO 28Sept 6.50 calls bought
  • CI Jan 220 calls bought
  • F Jan20 10 calls bought
  • AVGO Sept 225 calls sold
  • Options 101: Going ‘In the Money’
  • Do you know about our Options Starts 2018 symposium in Chicago next month?

Economic Watch:

  • Bearish: David Tepper, Ray Dalio: Economic expansion in late stages.
  • Bullish: GS sees no recession for at least 3 years. BAML says low-income consumers gaining faster.
  • Russell: Goldilocks going strong amid weak inflation, low jobless claims.

Events to Watch:

  • China trade angst all week.
  • Wed 9/19: Housing starts, building permits.
  • Mon 9/24: Tech sector to be split for communications index.
  • Wed 9/26: FOMC to hike rates?
  • Thur 9/27: Durable goods, GDP final revision.
  • Next Week: TradeStation Master Class in Florida.
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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.