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S&P Overview: Downside Bias as Ranges Emerge
- S&P 500 may need to test 2700 after successful 2815 test.
- Lasting rallies may be difficult until 20DMA rises above 30DMA
- Calendar more bearish with Brexit ruling (11/27), G20 (11/30), Fed hike (12/19) on tap. Italy budget drama not done, either.
- Potentially bearish that bonds and USD are rising in tandem.
- Sector mix bearish as safe havens lead.
- Expect significant chopping, with narrow ranges growing into wider ranges.
- Potential for 2700-2815 channel.
Tech Tales Worsen:
- 11/1: DOJ accuses Chinese companies of stealing chip technology.
- 11/3: Counterpoint of HK sees India iPhone weakness
- 11/5: Nikkei says iPhone XR volume ramp up canceled.
- 11/7: Square (SQ) weak guidance. Follows less-than-stellar results from MA, V, FDC, WP. Digital payment space under pressure.
- 11/8: Activision (ATVI) weak outlook highlights slowing video-game space.
- 11/9: Apple warns (6pm on Friday) of quality issues with iPhone X, MacBook Pro.
- 11/12: LITE guidance suggests weak iPhone production.
- 11/12: Ad wars on the Internet?
Between the Charts:
- Notice Nasdaq-100 lower high as Dow Jones Industrials made a higher high.
- Notice 2815 double top, broken trend line on S&P 500. Churning at 200-day MA.
- Philadelphia Semiconductor index ($SOX) finding resistance at old support.
- Is Nasdaq-100 slipping under 7000?
- U.S. market outperforming by wide margin.
- Careful not to get too bearish too fast. Money can rotate into health care, staples, REITs, utilities for the time being.
- S&P 500 may have begun longer consolidation phase lasting well into next year.
Don’s Watch List:
- Tomorrow: Advance Auto (AAP), Home Depot (HD)
- 11/14: Cisco Systems (CSCO), Macy’s (M)
- 11/15: Nvidia (NVDA)
Russell’s Watch List:
- Pfizer (PFE) breakout potential. Good for options.
- Apple (AAPL) nearing last week’s trendline support around $190.
- Twitter (TWTR) $28-36 channel forming.
- Don’t forget about retail into Black Friday.
- L Brands (LB) turnaround story building after comps surprise.
- Gold miners ETF (GDX) at risk of bearish continuation into year end, Fed meeting.
- General Motors (GM), Ford Motor (F) have stealth-rally potential after positive news events.
- Twilio (TWLO), FireEye (FEYE), Etsy (ETSY), Glu Mobile (GLUU): Not dead yet.
- Wireless towers stand out in REIT space: AMT, CCI, SBAC
- Use RadarScreen® to find “boring” stocks near highs.
- Airlines may have upside potential on strong economy, energy selloff.
Options Activity:
- 11/6: Marriott (MAR) April 110 puts rolled → April 100 puts.
- 11/12: Barrick Gold (ABX) Dec 11 puts bought for $0.10 to $0.12. (Story coming tomorrow.)
- 11/12: Itau Unibanco (ITUB) Dec 13-15 strangle sold for $0.70.
Forward Calendar:
- Tomorrow: Cannabis earnings (CRON, TLRY), HD
- Wednesday: CPI, CSCO, CGC
- Thursday: Retail sales, WMT, chips: NVDA AMAT. Oil inventories.
- 11/20: Housing data. Watch for signs of buying on bad news.
- 11/21: Busy with events but early Turkey Day exits likely.
- 11/27: Potential Brexit ruling by Brussels court. (Scottish challenge)
- 11/30-12/1 (weekend): G-20 meeting between Trump, Xi
- 12/6: OPEC meeting. Careful of overnight Saudi jawboning.
