Volatility Continues as Stocks Try to Hold Key Level


Stocks ended a losing week on a strong note as the S&P 500 battled to hold a key support zone.

The index fell 1.6 percent between Friday, November 9, and Friday, November 16. The decline followed strong rallies in each of the two preceding weeks. Technology continued to struggle.

Chart watchers may consider it bullish that the S&P 500 briefly fell below 2700 on Thursday before ferociously clawing back. Click here for more on the importance of that level. Is the market finding a base after October’s historic selloff?

Do you know all the market’s recent swings were anticipated on Market Action?
Sign up now for this afternoon’s session!

Two of the big fears worrying investors took positive turns. First, the Federal Reserve’s top policymakers suggested they may halt interest-rate increases sooner than feared. Second, comments by President Donald Trump on Friday lifted hopes about a potential trade deal with China.

News was less positive for big technology stocks. Apple (AAPL), for instance, was pressured by weakness at supplier Lumentum (LITE). Nvidia (NVDA) had its biggest drop in over 10 years on a glut of unsold graphics card — the latest victim of a worsening semiconductor slump. Data-center supplier NetApp (NTAP) also cratered on a revenue miss.

Retailers didn’t fare much better. Only one quarter ago, investors celebrated merchants like Wal-Mart Stores (WMT) and Nordstrom (JWN) for successfully entering digital channels. But this time around they punished both companies for weak store traffic. Suddenly the glass is half empty.

Oil’s glass was just plain empty. Black gold (@CL) had another bearish week, cratering about 5.5 percent to its lowest levels in almost a year. Inventories won’t stop growing.

S&P 500 with pivots near 2700 and 200-day moving average.

Real gold moved the opposite direction, apparently lifted by the Fed news. Futures on the yellow metal (@GC) had their best week in a month as they hold some long-term lows.

The S&P 500’s single biggest mover over the five day was PG&E (PCG). The California utility lost 39 percent of its value on worries it may be liable for California’s deadly Camp Fire.

This week features several reports before Thursday’s Thanksgiving holiday.

For starters, real estate: NAHB’s home builder index is today, followed tomorrow by housing starts and building permits. There’s also a side of retail earnings: Target (TGT), Lowe’s (LOW), Kohl’s (KSS) and TJX (TJX).

Wednesday is stuffed like a turkey with durable-goods orders, initial jobless claims, consumer sentiment, crude-oil inventories and Deere (DE) earnings. After that, activity is likely to snooze as traders hit the road for the holiday.

Markets are obviously closed on Thursday, with a half-day on Friday.

Advertisement #1 Trading Platform Technology - 8  years running!

Previous articleBrazil Bull Looks for Carnival Rally: Options Recap
Next articleThis Chart Shows Just How Bearish Tech Has Gotten
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.